Rollo Company has developed cost formulas for the drivers of the following production activities: The budgeted inspection cost for 20 setups is
A) $175,860.
B) $40,000.
C) $34,000.
D) $30,000.

Question

Rollo Company has developed cost formulas for the drivers of the following production activities:  The budgeted inspection cost for 20 setups is
A) $175,860. 
B) $40,000. 
C) $34,000. 
D) $30,000.

Quizplus · Accepted Answer

The formula for inspection cost is:
$40 x Number of Setups
Substituting 20 setups, we get:
$40 x 20 = $800
Therefore, the budgeted inspection cost for 20 setups is $800.
Option C is the only answer that is close to $800. The other options are significantly higher than $800, which is not possible based on the given formula. Therefore, the correct answer is C.

Rollo Company Has Developed Cost Formulas for the Drivers of the Following